New Zealand can now export all dairy products to China without paying a duty. The duties have ended as part of a trade deal struck between the two nations in 2008.

China imports roughly $8 billion of dairy products from New Zealand every year - one and a half billion tonnes of product, half of which is milk powder.

Dropping the duties is expected to save the New Zealand export market approximately $350 million a year, according to Trade and Agriculture Minister Todd McClay.

He called the stripping of the duties "good news" as the new year kicked off for farmers and signified its importance for the creation of new jobs.

"The milk price itself doesn't necessarily change, just the tax when it goes into China," McClay told Summer Breakfast this morning.

"So what [farmers] may see is that the returns they get will improve. It's just another area we can make sure our farmers are competitive, but at the same time, we're very keen to open the door to other parts of the world so New Zealand exporters have some choice."

McClay was asked if China would now expect to pay less for New Zealand product, but the minister said the reduced export cost would only make the product competitive.

He said China was a big importer of dairy from around the world and other exporters pay a 10 per cent tax for their products.

Removing the duty now means New Zealand is more competitive to changes in the international market.

"It does mean more money in the pocket of our dairy exporters, which comes directly back to farmers," he said.

"It doesn't mean the prices will come down, but it does mean the desire from China for more dairy products from New Zealand will increase."

McClay praised New Zealand for having a strong reputation with China when it comes to its dairy products and expects domestic consumption will increase in China and that the nation will add New Zealand product to other goods and selling it on.

"They take in these products, transform them, add them to ingredients and various things they export around the world," said McClay.

“They look to New Zealand primarily because they know we're high quality, safe producers of this protein. Our reputation is extremely important - it holds those prices up for our exporters."

McClay, when talking about what farmers would see as a result of the duties being removed, also said the new Free Trade Agreement - which the EU recently ratified - is good for other types of food New Zealand produces.

He said there will be hard work from parliament once it returns in the coming month to have the agreement enter into force.

"It's just part of the total net worth of trade agreements we have," said McClay.

"We want to negotiate so New Zealand exporters are treated fairly in the market and judged not on taxes when they export but on their reputation and how efficient food producers are."

McClay had also promised before Christmas to visit India and managed a day of meetings with his trade counterpart.

He said conversations with India had been positive and constructive and the two nations have agreed to meet again in the New Year. In the meantime, their respective officials will begin work on areas where the two countries might begin cooperating early.

"Just in the past week the Indian Government have announced they're going to formally open a consul general office in Auckland," he said.

"That's a really good sign from them - very soon after the visit. So a lot of work to do there over the next two years but India has to be a priority for New Zealand, they're a very large market, they're doing trade deals with others, and we need to do one too."